(ii) education as a part
of a curriculum for obtaining a qualification recognized by any law for the
time being in force;

(iii) education as a part
of an approved vocational education course;”.

Further
section 93(1) of the Finance Act, 1994, enables the Government to exempt
generally or subject to such conditions taxable service of specified
description. By virtue of the said power, Government has issued a notification
No.25/2012-ST dated 20th June, 2012, exempting certain
services. Sl.no.9 thereof reads as follows:

“Services provided to an
educational institution in respect of education exempted from service tax, by
way of,-

(a) auxiliary
educational services; or

(b) renting
of immovable property;”.

As defined in the said
notification, "auxiliary educational
services"
means any services relating to imparting any skill, knowledge, education or
development of course content or any other knowledge–enhancement activity,
whether for the students or the faculty, or any other services which
educational institutions ordinarily carry out themselves but may obtain as
outsourced services from any other person, including services relating to
admission to such institution, conduct of examination, catering for the
students under any mid-day meals scheme sponsored by Government, or
transportation of students, faculty or staff of such institution.

3.By
virtue of the entry in the negative list and by virtue of the portion of
the exemption notification, it will be clear that all services relating
to education are exempt from service tax. There are many services provided to
an educational institution. These have been described as “auxiliary educational
services” and they have been defined in the exemption notification. Such
services provided to an educational institution are exempt from service
tax. For example, if a school hires a bus from a transport operator in order to
ferry students to and from school, the transport services provided by the
transport operator to the school are exempt by virtue of the exemption
notification.

4.In addition to the services mentioned
in the definition of “auxiliary educational services”, other examples would be hostels,
housekeeping, security services, canteen, etc.

5.Thus the apprehensions conveyed in the
representations submitted by certain educational institutions and organizations
have no basis whatsoever. These institutions and organizations are requested not
to give credence to rumours or mischievous suggestions. If there is any doubt
they are requested to approach the Chief Commissioner concerned.

6.All concerned are requested to
acknowledge the receipt of this circular.